Only 40,000 out of a possible 200,000 households and businesses have signed up to the National Broadband Scheme over four years after it was first launched.
The top civil servant at the Department of Communications acknowledged yesterday to the Dáil public spending watchdog that the numbers availing of the scheme were “substantially below” original anticipated levels.
Secretary general Aidan Dunning told the Dáil Public Accounts Committee that the internet access provided by the scheme was “not high-speed”.
However, he insisted the scheme had advanced the policy goal of providing broadband services to areas which previously had difficulty in getting access to the internet.
Under questioning by TDs, he conceded that the anticipated socio-economic benefits of the scheme had not been achieved. He pointed out that the majority of people living in areas covered by the broadband scheme could now obtain broadband services from alternative providers.
It is estimated that only 68,000 households or businesses — or 34% of the potential market — will have signed up for the service by the time it runs out in 2014, against the original estimate of 63%.
Mr Dunning defended the non-setting of targets for take-up of the scheme as he claimed the Government might have been forced to provide subsidies to the broadband service provider if they existed and were not reached.
It was established in 2008 to provide basic broadband access to the 10%-15% of the population where private broadband service providers were not operating.
Mr Dunning said the scheme provides broadband coverage to one-third of the country’s electoral areas, which are primarily in remote, rural regions. The contract to provide the scheme was won by the telecom operator 3.
Mr Dunning said the total cost of the project, which runs until 2014, is just under €80m, of which €36m will be recouped from the European Commission.
A survey in 2010 showed that only 1% of users had an average download speed below the minimum acceptable limit of 1.6Mbps. The overall average was estimated at 3.5Mbps.
The minimum limit will increase to 2.3Mbps from next October when the average download speed is estimated to reach 3.4Mpbs.
Although two-thirds of users were pleased with the service, Mr Dunning admitted that one-fifth of users were dissatisfied with their broadband speeds.
Meanwhile, Mr Dunning revealed a project to bring broadband to schools would be extended to 200 schools along the western seaboard by September, following a successful pilot involving 78 schools.
The committee also heard that it is estimated that the evasion levels for the non-payment of the annual TV licence fee of €160 represents a loss of around €25m in revenue.
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